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    Mint Par of Exchange

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    Reshma Yewale
    The document discusses the differences between flexible and fixed exchange rate systems. Under a flexible exchange rate system, the exchange rate is determined by market forces and speculation in the foreign exchange market is common. In a fixed exchange rate system, the government determines the exchange rate by buying and selling foreign currency and speculation occurs due to rumors about changes in government policy.

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    Mint Par of Exchange

    Uploaded by

    Reshma Yewale
    6 views4 pages
    The document discusses the differences between flexible and fixed exchange rate systems. Under a flexible exchange rate system, the exchange rate is determined by market forces and speculation in the foreign exchange market is common. In a fixed exchange rate system, the government determines the exchange rate by buying and selling foreign currency and speculation occurs due to rumors about changes in government policy.

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    The document discusses the differences between flexible and fixed exchange rate systems. Under a flexible exchange rate system, the exchange rate is determined by market forces and speculation in the foreign exchange market is common. In a fixed exchange rate system, the government determines the exchange rate by buying and selling foreign currency and speculation occurs due to rumors about changes in government policy.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as pptx, pdf, or txt
    6 views4 pages

    Mint Par of Exchange

    Uploaded by

    Reshma Yewale
    The document discusses the differences between flexible and fixed exchange rate systems. Under a flexible exchange rate system, the exchange rate is determined by market forces and speculation in the foreign exchange market is common. In a fixed exchange rate system, the government determines the exchange rate by buying and selling foreign currency and speculation occurs due to rumors about changes in government policy.

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    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
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    MINT PAR OF EXCHANGE

    The mechanism for establishing exchange rates between currencies under the Gold standard was called the Mint Par of Exchange.

    Flexible exchange rate


    self-adjusting mechanism operates to eliminate external disequilibrium by change in foreign exchange rate

    Fixed exchange rate


    self-adjusting mechanism operates through the change in money supply, domestic interest rate and domestic price

    Flexible exchange rate


    depreciation or appreciation of a currency is determined by the market forces speculation in foreign exchange market is common

    Fixed exchange rate


    devaluation or revaluation of a currency is determined by the government speculation occurs when there is rumour about the change in government policy

    Comparison between Flexible and Fixed Exchange Rate Systems


    Flexible exchange rate exchange rate is determined by demand for and supply of foreign currency Fixed exchange rate the government fixes the foreign exchange rate by buying and selling of foreign exchange

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